Aledade’s Farzad Mostashari: It’s Clear that the ACO Model Works

Oct. 6, 2023
In a wide-ranging interview, Farzad Mostashari, M.D., discusses the success of his company, Aledade, in helping physicians to succeed in ACO work

The leaders of the Bethesda, Md.-based Aledade announced on Sept. 20 the results of its network of independent primary care practices in the 2022 year of their participation in the Medicare Shared Savings Program (MSSP), following the announcement on Aug. 24 of nationwide performance in the program by officials at the Centers for Medicare & Medicare Services (CMS), which runs the MSSP program, the largest federal program for ACOs (accountable care organizations).

In a press release posted to their website on that date, Aledade’s leaders announced that, “Today, Aledade, the nation’s largest network of independent primary care, announced that, in 2022, practices and health centers in Aledade’s network brought health care spending $572 million below Centers for Medicare & Medicaid Services (CMS) spending targets, returned $177 million to the taxpayer, and are projected to have earned more than $204 million in shared savings payments for their work in the Medicare Shared Savings Program (MSSP), all while improving the quality of care.”

Further, the press release noted, “In addition to being the largest network of independent primary care in the country, Aledade also had the most successful accountable care organizations (ACO) in the country. When it came to the top 10 ACOs in the Medicare Shared Saving Program (MSSP) by savings rate, Aledade represented 50 percent of the ACOs and 73 percent of the patients – a significant proportion given that Aledade only represented 7 percent of all patients in MSSP in 2022,” the press release went on. “Aledade’s work with primary care practices across the country will bring shared savings checks to 98 percent of its practices, including 99 percent of community health centers, for their work in 2022. Practices in Aledade ACOs earned $294 per Medicare beneficiary – roughly double the average hospital-led ACO savings of $140 per Medicare beneficiary across the MSSP program. That means the average-sized primary care practice working with Aledade earned $218,219 in shared savings payments for providing more proactive, preventive primary care in 2022. The United States stands apart in its underinvestment in primary care, and many practices run on small margins with little in reserve. Shared savings generated through value-based care provide valuable revenue that can be reinvested in care delivery, and Aledade’s 2022 results prove yet again that the company continues to deliver on its commitment to tens of thousands of primary care professionals and the millions of patients they serve.”

And the press release quoted Farzad Mostashari, M.D., Aledade’s CEO and co-founder, as stating that “The landscape of value-based care continues to evolve, but one thing has remained constant: physician-led value-based care is good for patients, practices and the communities they serve. The longer primary care professionals stay in value-based care, and work with Aledade, the healthier their patients can be and the more resources they earn to put right back into serving their community,” Dr. Mostashari said on that date.

And the press release noted that:

“Aledade’s model is creating a better experience for patients while lowering costs across the entire system. Results from CMS for MSSP performance in 2022 show that Aledade ACOs comprised 3 of the top 7 ACOs in the country for delivering timely care appointments and information- including its Virginia Appalachia MSSP Enhanced ACO (ranked 2nd), its Kentucky MSSP Enhanced ACO (ranked 4th) and its Louisiana MSSP 2022 ACO (ranked 7th).

Regional examples of Aledade practices’ success in 2022 include:

Georgia practices working with Aledade performed above the national average in depression follow-up, blood pressure control, falls screening, colorectal cancer screening and Statin Therapy, leading to more than $9 million in shared savings directly to practices.

Mississippi practices working with Aledade led the nation in providing Annual Wellness Visits to their patients and earned shared savings payments of more than $13 million.

The Aledade Arkansas, Michigan, Utah MSSP Enhanced ACO provided care to the most patients of any ACO in the top 10 of MSSP ACOs, bringing more than $16 million in shared savings to community primary care practices.”

Recently, Healthcare Innovation Editor-in-Chief Mark Hagland interviewed Dr. Mostashari about recent developments in the MSSP and about ACOs and alternative payment models (APMs) more generally. Below are excerpts from that interview.

For readers who haven’t been familiar with your work since you left your post as National Coordinator for Health IT in 2013, could you bring us up to speed on your transition to founding Aledade?

Yes—I left the ONC [Office of the National Coordinator for Health IT] during the government shutdown in October 2013, and co-founded Aledade in 2014. I left during a difficult moment. So many people had worked so hard for the federal government to improve care for Americans. The general feeling was that the federal government’s work was underappreciated. And I had to leave my badge and phone on a desk and walk through a dark building. I bike to work, and pedaled past the Washington Monument, and may have gotten misty-eyed. And in that moment, I had the feeling that government grant funding was not as powerful as I had thought it was. And so I spent nine months at the Brookings Institution, which was at the time was a center for ACO learning. So I said, let’s put together a toolkit and conference and action network for physician groups—I didn’t believe hospitals could do it—and I kept waiting for someone to create a company. And it felt like this was such an obvious business opportunity. And week after week, I was waiting for the announcement, and it never came. Matt Kendall had run the regional extension center program at ONC, and he joined as my co-founder, and we started the company in May 2014.

What does the world of ACOs and APMs [alternative payment models] look like to you right now?

Ten years in, what’s clear is what works. There’s a lot of literature on all the experiments that didn’t work; but we also know what works: giving primary care accountability for total cost of care. And if they can prevent hospitalization, they get to keep 50-75 percent of the money. That works. That’s where we are now, and the results from the Medicare Shared Savings Program just keep getting stronger and stronger.

And I always like to think, “What’s the question?” And the question used to be, “What works?” And the question now is, “How do we expand the program?”

One of the things that’s become clear is that physician groups are speeding ahead of hospital-based organizations in this work. A part of that has to do with the necessity for hospital leaders to continue to fill inpatient beds as a core financial requirements. What can hospital leaders do to move forward more quickly on this path?

I think that hospitals can be effective if they can achieve alignment. And what’s missing isn’t their ability to execute or understanding of technology or workflows or the right kinds of care; the heart of the matter is, can they get to a point, or will they be pushed to a point where, at least for certain segments, their incentives flip, so that it’s better to keep patients out of the hospital. Once that happens, that can be an element of success. And I’m not saying that Aledade will never be an enabler to hospital- and health system-based primary care; we already have partnerships with some hospital organizations. But what I’m waiting for is for when the CFO—not the director of population health or the CMO or even the CEO.

Could hospital-at-home programs help tip hospital systems into full-out participation in value-based care delivery and contracting?

No. The most important thing is setting the right benchmarking or trending approach. It’s always, you’re saving money compared to what? And that’s what CMS has been iterating in the MSSP, and we’re in a good place on that. Hospital-at-home is cool and it’s new, but it’s going to be only a tiny part of the change. And if you’ve aligned incentives, it can be a good tool, but it’s not an aligning tool itself.

So what is your secret sauce for the success that you and your colleagues have achieved at Aledade?

I think our secret sauce is service: a complete dedication to these practices, and creating an alignment to them where they trust us. We became a public benefit corporation to ensure everyone—policymakers, employees, but also, practices, that, forever basically, our board of directors will be focused on what’s good for our stakeholders. That’s why we’re the fastest-growing and largest primary care network in the country right now. We had 1,000 practices last year and have added 450 new practices this year. That’s our secret sauce. And if you have a service-oriented mentality, we’ll build the technology for you, and will execute on data, contracting, policy, coaching. And all that’s hard. But when I wrote the toolkit for physician-led practices ten years ago at Brookings—it’s still the same stuff. It’s what we do.

How does the health equity/social determinants of health lens harmonize with your overall strategic approach? CMS officials under this administration have affirmed repeatedly that they will move all their APM work forward under a health equity banner. Does that help?

It totally does. And if you want to perform well in these programs, you have to focus on the most vulnerable, not the most privileged, because there just isn’t that much room for the most privileged. And part of a health equity lens is learning, if we want to reach and engage poor populations or rural populations or Black populations, what are the things you have to do differently? So, bringing a bigger toolkit becomes part of success. But I’ll also say that I sometimes feel as though health equity and SDOH become catchphrases and become so vague and lose meaning. And people will do some little tiny thing.

We have to ingather those elements in some consistent way and approach them in some consistent way, right?

Yes, we looked at that from a first-principles perspective: what would save the most lives and avert the largest number of premature deaths? That focuses you. What could we do today to have the biggest impact on reducing disparities in mortality around race, in America? And you know what the answer is? There’s a ten-percent difference in blood pressure control between Black and white Americans. And that leads to the differences in heart attacks, strokes, and kidney failures. That’s our approach. It’s much more data-driven and “first principles.” When you ask us about health equity, I’ll talk about reducing disparities in blood pressure control.

What have you most learned about data and analytics in doing all this work?

I think when I was at ONC, undervalued health plan claims data. And it’s true that clinical data adds an amazing new dimension; but the universality and comprehensiveness of payer claims data is just awesome. Your EHR data can go deep on one patient, but the payer claims data goes broad and pulls in everything around one patient, and the combination is dynamite.

What should health system leaders be thinking about now?

How can I save the most lives? That’s what they should be thinking about.

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